U.S. net farm income is expected to drop for a third consecutive year in 2016, sinking 17.2 percent to $66.9 billion due largely to weak returns for livestock, dairy and poultry farms, the U.S. Department of Agriculture said on Wednesday.
The updated forecast from the agency's Economic Research Service (ERS) was down from its August forecast of $71.5 billion and down 46 percent from record profits for the sector of $123.7 billion in 2013.
If realized, the income would be the lowest since 2009, according to the ERS, signaling pressure for the slumping farm sector.
The weakening farm economy has triggered cost cutting and job reductions at major farm input providers like seed and chemicals company Monsanto and equipment maker Deere , both of which reported lower revenues in fiscal 2016.
Meat processor Tyson Foods this month reported a steep drop in sales and forecast further headwinds into 2017.
Cash receipts for producers of animals and animal products - including dairy, beef, pork, poultry and eggs - are projected to fall 12.3 percent to $166.4 billion this year, the lowest since 2011, ERS data showed.
Chicago Mercantile Exchange lean hog futures plunged by nearly 41 percent in the third quarter, the steepest quarterly decline on record, as cheap feed grains encouraged a much-expanded hog herd. CME live cattle fell 18 percent in the quarter, also the largest drop on record, as beef faced stiff competition from abundant supplies of cheaper pork and poultry meat.
Row crop farming cash receipts were seen unchanged at $186.5 billion as stronger returns for soybean and cotton producers were offset by declines for corn and vegetable farmers.
Chicago Board of Trade corn and soybeans have each notched new seven-year lows in 2016 as a record-large U.S. harvest swelled global supplies.